No Longer a Luxury: Imported Cars and Liquor to Get Cheaper as India and the UK Sign Historic Trade Deal Benefiting Millions

National News: India and the United Kingdom today signed a historic free trade agreement (FTA). The agreement was signed during Prime Minister Narendra Modi's visit to the UK in the presence of him and British Prime Minister Keir Starmer. The deal, agreed upon in May 2025, was signed by India's Commerce and Industry Minister Piyush Goyal and his British counterpart, Jonathan Reynolds. Calling it a "historic milestone," Prime Minister Narendra Modi said, "India and the UK have successfully concluded an ambitious and mutually beneficial free trade agreement."

What will be the benefit to both countries?

The agreement aims to double trade between the two countries to $120 billion by 2030. 99% of India's exports will get duty-free entry to British markets, including leather, footwear, textiles, gems, and jewelry. Import duties on UK whisky and automobiles will be reduced, with duties on whisky and gin falling from 150% to 75% and then to 40% over a decade. Duty on automobiles will fall from 100% to 10%.

The service sector will get a new boost.

The agreement will promote mobility of professionals such as those in information technology, financial services, yoga instructors, chefs, and musicians. Under the Double Contribution Convention, Indian professionals temporarily employed in the UK will be exempted from social security contributions. 

Economic and social benefits

The agreement will promote cost-effective trade in sectors such as cosmetics, aerospace, medical equipment, and engineering products. India's exports to the UK are expected to grow by 12.6% to $14.5 billion and imports by 2.3% to $8.6 billion in 2024-25.